REG - RS Group PLC - Q4 Trading Statement

RSAnnouncement

05/04/2023 07:15

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RNS Number : 3901V  RS Group PLC  05 April 2023

5 April 2023, 7.00am

 

RS Group plc issues a trading update for the fourth quarter ended 31 March
2023 ahead of publishing full-year results on 23 May 2023

 

CONTINUED PROFITABLE GROWTH

 

DAVID EGAN, CHIEF FINANCIAL OFFICER, COMMENTED: "Effective execution and the
ongoing hard work, enthusiasm and passion of our people has led to a very
strong performance in 2022/23 and we anticipate full year adjusted operating
profit to be slightly ahead of consensus expectations(1). While revenue
momentum has slowed in the fourth quarter against tough comparatives, we
continue to drive profitable growth, manage our costs appropriately and invest
where we can generate the greatest value."

 

SIMON PRYCE, CHIEF EXECUTIVE OFFICER, COMMENTED: "I'm excited to be joining RS
at a time when we have so much potential and the strategy, people and
resources to realise it. We enter 2023/24 with a strong pipeline of potential
acquisition opportunities and confident in our ability to outperform even in a
more difficult economic environment as we invest further to expand our
solutions offer, broaden our product range, improve our digital experience and
extend our technical customer service and support."

 

               Like-for-like revenue growth(2)
 Region        Q1 to      Q2 to      Q3 to      Q4 to                 Full year to    Mar 2023(3)

Jun 2022
Sep 2022
Dec 2022
Mar 2023(3)
 EMEA          16%        14%        12%        6%                    12%
 Americas      24%        19%        6%         (4)%                  11%
 Asia Pacific  13%        6%         (8)%       (15)%                 (1)%
 Group         18%        15%        8%         1%                    10%

 

Q4 trading remains solid with our industrial customers reflecting the strength
of our core proposition

·      Like-for-like revenue growth of 1%, despite weak electronics
revenue.

·      Our industrial product ranges, c.77% of Group, grew like-for-like
revenue by 10%; electronic products down 14%.

·      EMEA continues to outperform against tough comparatives with
volume growth in our industrial ranges offsetting weaker electronics products.
This reflects our more solutions-led and specialist product offer and service.

·      Americas slowed in Q4 against very strong comparatives combined
with a softer market, customer destocking and some rebranding disruption. We
are strengthening our omni-channel and product and service solutions offer
under the RS brand. Risoul, our acquisition in Mexico, is trading strongly and
integration is progressing well.

·      Asia Pacific continued to be impacted by a greater exposure to
electronics and single-board computing, geopolitical issues in China and the
hit from COVID-19 lockdowns. However, we continue to manage our costs
appropriately as we invest and refocus our offer towards the industrial market
and solutions.

·      Our own-brand, RS PRO, grew like-for-like revenue by 16%.

·      Digital like-for-like revenue increased 5%, with 1% web growth.

·      Our ESG focus has been recognised with new AA and A ratings for
MSCI and CDP respectively.

 

Improved gross margin and tight cost control are expected to deliver adjusted
operating profit margin improvements

·      Our gross margin improved, benefiting from a one-off price
inflation gain and margin optimisation work.

·      Tight cost control and more targeted operational investment is
partially offsetting inflationary pressures.

 

Our full year profit performance is anticipated to be slightly ahead of
consensus estimates(1)

We expect our full year revenue to be in line with consensus estimates but our
adjusted operating profit to be slightly ahead reflecting gross margin
benefits and strong cost control. We enter 2023/24 well positioned to face the
more difficult market environment. We continue to invest in our proposition to
drive further market share gains while managing our cost base appropriately as
we target value creating growth and are confident of the Group's strategy and
future prospects.

 

 

 

Notes:

1.         Consensus for the year ended 31 March 2023 is revenue of
£2,987 million within a range of £2,867 million to £3,079 million, adjusted
operating profit of £382.0 million, within a range of £374.9 million to
£386.2 million and adjusted profit before tax of £373.0 million within a
range of £368.5 million to £376.8 million (source:
RSGroup.com/investors/analyst-coverage).

2.         Like-for-like revenue growth is growth in revenue adjusted
to eliminate the impact of acquisitions and the effects of changes in
exchange rates and trading days year on year. Acquisitions are only included
once they have been owned for a year, at which point they start to be included
in both the current and comparative periods for the same number of months.
2021/22 is converted at 2022/23 average exchange rates for the period.

3.         Estimated figures at time of reporting.

4.         We expect to see a negative impact of around £11 million
on revenue from fewer trading days in 2022/23 compared to 2021/22.

 

 

 Enquiries:
 David Egan                       Chief Financial Officer  020 7239 8400
 Lucy Sharma                      VP Investor Relations    020 7239 8427
 Martin Robinson / Olivia Peters  Teneo                    020 7353 4200

 

 

Conference call details

There will be a conference call for analysts and investors today at 8.00am UK
time. A recording of the conference will be provided shortly after the event
via the investor relations page of the RS Group website:
www.rsgroup.com/investors (http://www.rsgroup.com/investors)

Please find the registration link below to join digitally. It is advisable to
pre-register early to avoid any delays in joining the conference call. To ask
a question, participants will need to be connected by phone.

Pre-registration link: https://webcast.openbriefing.com/rsgroup-apr23/
(https://webcast.openbriefing.com/rsgroup-apr23/)

Participant dial in number:

United Kingdom:                  020 3936 2999

All other locations:              +44 20 3936 2999

Access code:                        513839

Conference call timing

Date: Wednesday, 5 April 2023

Time: 8.00am UK time

 

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